Karnataka High Court
The Commissioner Of Central Excise vs M/S Itc Limited on 7 March, 2011
Bench: N.Kumar, Ravi Malimath
W 3 "
IN7?fi§HfififCQSRTCN'KARNATAKAlfi"BANGALORE
DATE9 THIS THE 7TH DAY QF MARCH 2011
PRESENT
'ma HCEWBLE MR. JUSTICE m<uMAR %' 1' V
AND
THE HOIWBLE MRJUSTICE Rg\VI f§?1Aj§-fMATE%._.: " V V
CEA.NO.104 OF 2t;*1o>._ "
BETWEEN: ' % '
The Commissioner of Cen__t:'aE Exc;i.s€:s'»v.__ _V
Bangaiore --II, Commissianeraté, _ A .4 V
Queems Road, ~ ' 1 "
Bangaiofg _%5s%¢Aem;%%% - ? WAPPELLANT
(By Sri Y.HéaVrLi4pe~asa'::f_,
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M363 t':T'2a__Ee:.L»: ht.é'_..\{i i =,' agé,
Ja:a+::ob::, ' *
% _Banga"i--ore.. ~9 3:50 35?. ..,RESPONDENT
Ssfi K.S:Rav§shankar, Advocate) *%x*$ § This CEA filed under Section 356 0? the Ceritrei Excise Act, 1944 arising cut of Grder dated OS/0s'§fZ'u'3..l£3. passed in Final Order No.?DO/2010; praying Hezfbie Ceert may be pieased te:
1) to formuiate the substaetéai questions Qf"'i:3:\.r\:'i$'teL'te'dd'u therein; 2) set aside the order detepc£.,.QS/O4-/'2{3"10fieeirzer._ "
Order Ne.?OO,i201C¥ passed by the CVESTAT,Essen-g:;aI.ere:._ This CEA Coming pr': for V4edrf2«i_ssioeY",."_r'¥5r}E's"
E\i.§<UMAR 3., deiivered the f0ilCv$.f'é':*.Vg:--
?iMuUDGuMmME*4¥'Tf'r This appeal is byvthde're*Qer§.ue'échfireagéng the order passed by the tréhaspai, order ef the appeltete Vriéfeed of the excess duty paEd__t_d ti'2e':'asL§;eseee';~ "
T:h'e~[.des_~s§essee4V'1%/i/s._1"EC Limited; Bangaiore are menL1facti;a'rVer's% of.§i'g?a're't':;.g§~feéiing under Chapter 2.4 of CETA: 5.1985" 'p.rovE'sie'pai order came to be passed V.perrri'i't{Ein5<j'Atfi"e_a$seAS§ée te pay duty as per the price Eists '22*r.<3:Er;_e. under the erstwhéie Rafe 173C or the Centyei E:«ci'§e:ATRuIes, 1944. Sebseqeentiy, an erder in TV-.p_%eerig;naz".ee.22;2ep: dated 2e,e:r:2ep1 féneiézed the pravigiona-t assassment fer the parted frern 01.iG.19"?§ to 28.02.2083 and zgiemarzdeé a éifffirantial duty of Rs._S8V3;..:i§.vv arereg apgreximateiy, from the BSSQSSSE. the said arder, the assessea prefegf2i§d»_'zl:r2 ap;;§§,a;t§i fme Cernmigsiener at' Central Excise {Aiippezlzi-3'); erigirzai was set aside and the V-"£f1a.:};er »V.§~.ra .<§"
Assessing Authority for re--deter§;:§:;§i:':x,¢'t§r;;""s <§'f't%3f:e jass:f§é§ssabie vaiue 91' the cigarettes. ~-£5: we '§"ra%§>»qa.2esti6n after aitawmg the cEed;:_ctic:r':s...e33:§gwab3Aé.LV i'i'.iT.ia:*~a¥'.%.V,'* After such re--determinati_¢%§, {:ET:e'§V;'a$:é;es3:»f_ii§g ';§?{u§fffi§Ei'1'y"'heici that a sum of in excess by the assesseé- _fo:f th§"--'afa_;;é$§'é'd_jfi£°t_r5~oG, In order to refund the aforesaid ée>:,r:e:-:5 a'm{:::£ ::t,""'-thé Assessing Authoréty caited upon @336 a.ssess§:;"2..e;_ *to pfoduce documents to substantiate ZHV,tfée.:§V§éc.*u;iE§;3V:;§§'giaimed. The documents were producech Hx:%.g~:Ie5'a;eTE,"'v4i?7As§_:e~§%;':%""03' refunding the said amount; by as':
V V' _Qrd'e:*"":--.--'iai:»:~;7& 3.68.2064 after Sanatiersing of the refund, he : v4."'----e§3§e§di[t:;2d":'i*aé game its the Censumer Weifare Furtfi invoking T:§1£%_ fp':*:3'é;és§:3ns :3? unjust enriahmerzt fiaged cm ting it~i:3r:"b§& K r.so?'sra'rteiy feiés on the assessee. However; it held that it is Suorerrie Courtfs judgment in the case of M/s.MafetJai Industries.
grreterred an appeei to the Commissioner Bangalore. The Commissioner of Agpeals_-'S'et"'-esi,dei the Aggrieved by the said order, as4ses'.--3ee_ said order and heid that the assessee is'_"eiii'git§ie 'for and the case is not hit byhthe prox/'isionsjot~~..a.1r}j:;ast% enrichment. However, the asses-see.._v_had.'reotresvtied for adjustment of the aforeVsa..ir§arrroirnt. sanctioned for refund of the anf1ounti"w'vh.i§;h to be due by the assesseert the said adjustment"viwre.s:'--'VtiQvnVe adjustment, the amount:2_wh__ishnVV'tr;r,a--s_flactu..er'iigr__ due to the assessee was Rs.1,26,6E'3,'rSr9:5_/~' ..'i?h~e'4's'aid amount was ordered to V be rer't;in"<:Ee.ti to t'hie_VVaVssessee. Aggrievea' by the said order, trteferred an appeai to the tribunai. The trihL'.i'n_ei hre'§'ti.,'V_ttir§3:'tr'the doctrine of unjust enrichment appiies to the farjts-{rt the {Z3SE3. It aiso heid that the burden of gjrovritijig otthe iiahiiity is not gassed on to the customer for the adjndicaténg autherity to decide finatly whether any such burden is passed en te the customer. Ho=u§.{e~¢z_e'r.,_ reiying on a judgment at the Patna and Haz'ya'ha§;;~~i'é_§V¥'::..vu Court in the case of CEE, CHANDIGARH VS. V"
GENERAL MILLS reported in 2007 tritaunat upheld the order of the V)ft;;';j'e!%ate»'"%3LI,»th.ori"i;y;."
Aggrieved by the same, the rev\ufe~:»h»:ue_VVis ith--aippjeaiigbefore this Court. A H
3. Thea ' €Cd'dn.$e§:V "'V.'ap-nearing for the appenant asea.i§i'h_u_t;;»';the' oijder contended that in View 0f7t_ne._ judgment 0f the Supreme Court in the catse--- INDUSTRIES LTD. \/S.
-*'-- /I'\/\ I "7' 1 _ drvIQ:7~.:"d;?nve f-iA.1_'t§;V3OFf€?C?' in 2997 45 ) E..L.i. 2:47 {s;,:::. )1, theadvdcttftihe (%)'f'«.!.JVnjUSii enrichment wit! not appiy to the case anl*eta_h.d§'~4:"';;.e_' tv§§§€:""burden of showing that the duty is net V _ passed tenth-e""V'custdmer in net discharged by the asaessee, .AusseVS's..ihg Autherity was justified in directing crediting '_'_1~__ef._VVt*ne' amnnrd: refnndabie te the WeEfare Fund. The ....5_.
Aopeiiate Authority was in error in interfering with the said order. Even though the tritiunat has accepted the caseof the revenue in at! aspects, whiie the granting th'e"'--vf§ifh_a}i*.,'< retief, it has, fotiowed by the judgment of the.-,4'E5etne:' Haryana High Court ahci uphetd the.:oa'*de.r ';5{p4;ieE:,éj:g Authority, which is expressiy i;E'iiego_ii"':ar1:ic'i.ecovtis interference.
4. Per contra, '"t'he- igzérrvieti'fgiooosel for the assessee supported the 'o:'{*dVer,~ ~ it .Froh*3""it\he'aefoireeaed -'materéai on record, it is dear thatitheii.i§\o;3ei'i":,te--iilliiithority, the tribune! and the _ ciepart_h1er%.t oroC'eeoS oh. the assumption that this is a case Vnigof Cioiim refond by the assessee under Section 118 of the 'E.;«;,.«:Tisoi"'g1..§;:,iAV.;'1s§44 and therefore, the burden of unjust V _ehriohmeo't' 'a";i$;:>Iies. However, the materiat on record, is not in dispute, discloses that the duty was oeid in _'_&r~__oo.rVs5oehce of e orovisioriaé assessment whereas in the fine! i, e_....
..7..
erder of assessment, the Assessing Autherity directed the assessee to gay the differential duty. The said order was Chaiienged before the appellate Autherity. The Authority set aside the said erder and dite't:tedVV'".s:'%er::_""r "
remieterminatien at the duty payatfie»-.t>y --'the"flassessvee. After said re--determination ef t5a3fAat>.,lVe, Assessing Authority found Ai'i:u_i_:y the assessee is in excess ofvwhat tdbe.aai'd..under the Act, The amount was qu"ar'aat_iféed,V was cailed upon ta furnish" his case.
The assessee' Refund was sanctioned. ._ Ihievtactk_:ithe"a»s:sve_sse'e specifically pleaded that he is due cettaiiin aVmd't;ht»sei:'e the department under various other,.l§le'ad.s, whic-h__Vis not the subject matter of the case on that the excess amount to be adjusted tee;a't;?d%s him and that he be paid the balance V _arhouht 'E-?\'.'§tj4f26)(66)(5gS/i": The said adjustment was acted upon arrd it was held that only the '_'_&ié~_af'ate's'a§d amount is liable ta be refutzded and the said .. 3 ...
amount was hanciaci over to the assessee. New, the questicn is whether this amatmt which is aiready refungjecf is the assaasea is liable to be reclaimed and <:reé.§t'e.:d~..'_tl<'§--VV the Welfare Fund account. The Apex Court at ~ the judgment in the case of Mafatial. ,Ii:du:§tfié:;:i'_§i.,.t.{f;' Union of India, has clearly laid.' ci,'_{>w'n ZL'_3"°l'd_e.l' 'uv;!t.--a%f'*ii_:
circumstances a claim for refu'.5it£:"--a.fisa--a"-unda_t E-fa. when the levy is unconstftuti0na_l..4.a:t»vMien tl1.£3"lét{y illegal or when on the basis at if it is found that an excess airiagmt tmly in those circumstance}; The subsequent judgment of the case of COMMISSIONER OF CEzm2,}§l,: %' f/PIUMBAI-II vs. ALLIED raw»-vs * ._ '1'V\;'L";'u,El LY". reported in .2004 (.2: } paragraph 14 held that "Para 104 of the jiidg':%r_a}2'tv4:"E;*2,»V__ Casa Mafatlal Industries Ltd. (supra) V Vt _$tateE";-- thcitliftfefund arises upon finalisation of prsvisional Section M5 will not apply," Similarly, the 4'1'_i.;i_i"gi'fg'ai--éi'ii: 91' the Apex Caurt in the Case of COMMISSIONER /.« ' _/, _ 9 _ as CENTRAL EXCISE, CHENNAI vs. T.v.s.suzw<1 LTD. reported in 2003 (I56) E.I,,.T. 252 (s.c:.) hefd that the refund ciaérns eensequent neon finaiézatéon eta provisiena! assessment does not attract the bar_;nt'«Li;'1j.dst§__A' enrichment. Even subsequent to 1989 to "
to Section 118(2), the case of un}pst:.ent§ét§»rn4e't'at"i's'~.n'dt__i' attracted.
In the instant Case, the'V'Vh't't.e'i'eventV2 tram 31.10.1975 to 28.02.1§S3 te Section :1.:e(2) of the Act, {sfV»n:t>t"'a:V,.eté's:eénsing out ef Section :1'idBt'of.:the reft1_'nd"iVs paid in pursuance of the fina§i§:atto.n of thent.p'tre_§fditn£.§.t>;tai assessment order and in fact, the Assessi'ng_;%.utn_nfit'§/ was right in hoidfng that the "V"ti_<')<:t::v-'Vite Qt: unjust Venn-ennaent does not appfy in the facts of the' ease"re:i'yi'n«;::Vcn the judgment of the Constitution Bench ttfe dectrine of nngitsst enrichment and the entire:
" ' it as 'wed as _snV'téise:tquent decistens.
""WeVAate' satisfied that the case on hand does not ..3_Q__ Ciarm of the department is not groper as their entire ciafm is based on the assumption that the refund is m;e';ci'e:"ir)_ ;3%_£:"SL£aF':C€3 er" a claim made under Sectieri 118 Therefore, we do not see any substantiai q_z.,:~es.t_EbhV'o§ iaw "
that arises for consideration, whichflimeiritésfjy a§4drr1'i.ss'ior3:."$50.;TA' substantiafi questien of law a:fiss:_s for" .<;o'I"1sEdesra'Mi:rV§:r:}f Tiheyh facts are dear and therefere, ufi:.e_§1re:a_Vis é_Vrh'e§ritV'f§n this appeai. Accordingly, thei_;é";;:.5>ea.i_§ is. §=H::S'w'i-ff-i-L58 g?¥?W5%??
sxgs V'V_Prs* V